Having sorted out land issue, Hero set to begin plant construction

hero motors andhraMore than a year-and-a-half after it signed an MoU with the Andhra Pradesh government, Hero MotoCorp Ltd (HMCL) has submitted plans to begin production at its proposed plant in Chittoor district of the state. The company had signed a MoU with the Andhra Pradesh government in September 2014 for setting up a two-wheeler manufacturing facility at Madannapalem in Chittoor district.

The plant would come up close to the existing Sri City SEZ.

According to the plan, the two-wheeler giant will commence production of 5 lakh units (per annum) in the first phase by December 2018 with an investment of Rs 800 crore, a state government’s order said on Sunday.

It will add another 5 lakh units to its production capacity in the second phase by December 2020, and an additional 8 lakh units in the third phase by December 2023 with an investment of Rs 800 crore for both the phases, state’s Industries Secretary M Girija Shankar said in the order. HMCwill provide employment to 1,500 people in the first phase and another 3,500 in the subsequent phases.

This was the first major project in the manufacturing sector that the N Chandrababu Naidu government succeeded in attracting to the state post bifurcation (of the state in 2014).

HMCL informed the government in a letter on March 31 that the upcoming plant would be state-of-the-art and deploying robotics, cutting edge manufacturing technology and green building technology and it would be made a manufacturing hub for two-wheelers for east and south Asia.

HMCL also promised an investment of another Rs 1,600 crore for development of ancillary units that could create direct and indirect employment for 15,000 people. In addition to this, employment for 2,000 people would be created by the supply chain partners in Phase-I and would go up to 6,500 at the final stage of expansion, the firm said.

The state government also agreed to allocate another 200 acres of land within a radius of 25-35 kms of the mother plant for the proposed ancillary units, that are expected to commence production in the first phase by December 2019 with an investment of Rs 400 crore.

Another Rs 600 crore each would be invested for the next two phases by December 2021 and 2024, respectively, HMCL had informed. The state government accepted the request of HMCL to permit it to diversify its manufacturing activity into three-wheelers, electrical vehicles, aerospace and defence and technology relating to green-tech through joint ventures and business associates, the Industries Secretary said.

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